Exhibit 10.16
AMENDING AGREEMENT
THIS AGREEMENT dated effective the 1st day of December, 1998,
BETWEEN:
ARCTIC PRECIOUS METALS, INC.
0000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, 00000
("Arctic")
- and -
XXXX X. XXXXX
0000 00xx X.X., Xxxxxxxx, Xxxxxxxxxx 00000
(the "Employee")
- and -
ROYAL OAK MINES INC.
BCE Place, Suite 2500, 000 Xxx Xxxxxx, Xxxxxxx,
Xxxxxxx X0X 0X0
("Royal Oak")
WHEREAS:
A) Arctic, Royal Oak and the Employee entered into a written agreement
effective the 22nd day of May, 1997 to record the terms and conditions
of their employment relationship (the "Employment Agreement);
B) Arctic and Royal Oak wish to amend the Employment Agreement on the
terms and conditions hereinafter set forth to entice the Employee to
continue his employment with Arctic throughout the restructuring of
Royal Oak, and to assist Royal Oak to avoid seeking the protection of
bankruptcy and insolvency legislation thereby protecting shareholder
value; and
C) Arctic and Royal Oak believe it is in their best interests to enter
into this Amending Agreement,
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the following
mutual provisions and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each party), the parties
covenant and agree as follows:
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ARTICLE 1
AMENDING PROVISIONS
1.1 The parties hereby covenant and agree to amend the Employment Agreement
as follows:
a) Subparagraph 6(b.1) be added as follows:
"(b.1) TERMINATING EVENT BY NOTEHOLDERS
In the course of restructuring Royal Oak, in the
event that one or more holders or former holders of
Royal Oak's Secured 12.75% Senior Subordinated Notes
due 2006 (the "Noteholders") or any associate or
affiliate thereof and/or any person or persons acting
jointly or in concert with any one or more of the
Noteholders or the associates or affiliates of any
one or more of the Noteholders, whether directly or
indirectly:
i. acquire(s) beneficial ownership or control and
direction over the securities of Royal Oak which
represent or which are convertible or exchangeable
into securities of Royal Oak which represent or
would, upon conversion or exchange, represent 50% or
more of the total number of votes attached to Royal
Oak's then outstanding securities entitled to be
voted on the election of directors of Royal Oak;
ii. acquire(s) or otherwise hold(s) the right to elect,
appoint or nominate for election as, directors of
Royal Oak, such number of persons as is equal to or
greater than 30% of the number of directors of Royal
Oak holding office as directors of Royal Oak
immediately prior to such right being acquired or
held; or
iii. cause the dismissal (including without limitation,
constructive dismissal) of Xxxxxxxx X. Xxxxx as
Chairman or the Board of Directors of Royal Oak,
(Clauses i., ii. and iii. above are hereinafter
referred to individually or collectively as a
"Terminating Event")
the Employee's employment with Arctic or any
successor corporation shall be hereby guaranteed to
age 62 in such senior management or consulting
capacity as may be determined by Arctic or its
successor corporation at a salary and bonus equal to
the salary and bonus received by the Employee with
respect to the last completed fiscal year of Arctic,
and benefits (on a fully vested basis) comparable to
those accorded the Employee prior to the Terminating
Event.
Should the Employee elect to pursue such guaranteed
employment to age 62, he hereby agrees to fully and
capably perform all duties assigned to him by Arctic
or its successor corporation and waives any
subsequent right to claim for constructive dismissal
during the course of such employment and compensation
on termination after age 62 beyond the minimum
required by law.
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Conversely, the Employee shall have the option,
exercisable within 30 days of the Terminating Event,
of terminating this Agreement and his employment
hereunder, immediately on delivery to Arctic and
Royal Oak of a notice in writing (the "Terminating
Notice"). If the Employee so terminates this
Agreement pursuant to this subparagraph (b.1), the
Employee shall be entitled to the following:
(A) The Employee shall be paid within ten days
of receipt by Arctic of the Terminating
Notice, (I) an amount equal to two times the
aggregate of the Employee's then current
annual salary, and (II) a bonus to be
calculated as the average bonus paid by
Arctic to the Employee in the three full
fiscal periods preceding the Terminating
Notice,
(B) At the Employee's option as set out in the
Terminating Notice, Arctic shall either: (I)
pay the Employee within ten days of receipt
by Arctic of the Terminating Notice a lump
sum payment equal to the then present cost
to Arctic of all fringe benefits as set out
in subsection 5(a) of the Employment
Agreement (the "Fringe Benefits") which
would have accrued to the benefit of the
Employee during the period of 24 months
immediately following receipt of the
Terminating Notice by Arctic; or (II) the
Employee shall be entitled to continue to
participate, for the life of the Employee,
in Arctic's Fringe Benefits in place for the
Employee and his family at the time of
receipt by Arctic of the Terminating Notice.
In the event that the Employee chooses to
continue to participate in the Fringe
Benefits, Arctic shall pay the premiums
relating thereto for a period of 24 months
following its receipt of the Termination
Notice such that there will be no
discontinuation of benefits thereunder. The
Employee covenants and agrees to continue
paying the Fringe Benefit premiums from the
25th month forward. The Employee may, in his
sole discretion, elect to cancel any or all
of the Fringe Benefits for the Employee, his
family, or any one or more of them on
written notice to Arctic. In the event that
any or all Fringe Benefits carriers do not
permit the Employee and/or his family to
participate in any Fringe Benefit following
his termination from Arctic, Arctic hereby
covenants and agrees to obtain an equivalent
Fringe Benefit plan at substantially the
same cost for the Employee and his family,
in which event Arctic's obligations for
payment as set out above will continue to
the same extent as if the Employee continued
to participate in Arctic's Fringe Benefits,
and
(C) Arctic and Royal Oak shall provide the
Employee with the right to immediately
exercise all approved outstanding options,
subject to confirmation of Exchange approval
as specified in each Stock Option
Agreement."
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1.2 Except to the extent specifically amended hereby, the parties confirm
the provisions of the Employment Agreement.
IN WITNESS WHEREOF this Amending Agreement has been executed and delivered by
the parties effective the date first above written.
ARCTIC PRECIOUS METALS, INC.
Per:______________________________
Authorized Signatory c/s
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
---------------------------------- ------------------------------
Witness XXXX X. XXXXX
ROYAL OAK MINES INC.
Per:______________________________
Authorized Signatory c/s
